PHILADELPHIA, PA--(Marketwired - Aug 2, 2016) - Resource America, Inc. (
Second Quarter 2016 Highlights
- GAAP net loss attributable to common shareholders of $272,000, or $0.01 per common share-diluted, and adjusted net income attributable to common shareholders of $2.0 million, or $0.09 per common share-diluted (see Schedule I)
- Increased real estate assets under management by 10% to $4.2 billion since June 30, 2015
- On May 22, 2016, Resource America, Inc. entered into a definitive agreement to be acquired by C-III Capital Partners LLC. Resource America stockholders will receive $9.78 per share in cash
Second Quarter 2016 Results
Resource America, Inc. (
The Company reported adjusted net income attributable to common shareholders, a non-GAAP measure, of $2.0 million, or $0.09 per common share-diluted, and $5.7 million, or $0.27 per common share-diluted, for the three and six months ended June 30, 2016 as compared to adjusted net income attributable to common shareholders of $3.4 million, or $0.15 per common share-diluted, and $5.7 million, or $0.25 per common share-diluted, for the three and six months ended June 30, 2015. A reconciliation of the Company's reported GAAP net income (loss) attributable to common shareholders to adjusted net income attributable to common shareholders, a non-GAAP measure, is included as Schedule I to this release.
Assets Under Management
The following table details the Company's gross assets under management by operating segment, which increased by $1.2 billion (6%) from June 30, 2015 to 2016 (in billions):
| June 30, | |||||||
| 2016 | 2015 | ||||||
| Financial fund management | $ | 18.0 | $ | 17.3 | |||
| Real estate | 4.2 | 3.8 | |||||
| Commercial finance | 0.8 | 0.7 | |||||
| $ | 23.0 | $ | 21.8 | ||||
| Net assets under management (1) | $ | 9.6 | $ | 10.6 | |||
| (1) | Net assets under management represents the proportionate share of assets managed by the Company after reflecting joint venture arrangements. At June 30, 2016, net assets reflects the Company's 24% interest in CVC Credit Partners, L.P. ("CCP"), the Company's global joint venture, while net assets as of June 30, 2015 reflects the Company's 33% interest in CCP. | |
A description of how the Company calculates assets under management is set forth in Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2015.
Highlights for the Second Quarter Ended June 30, 2016 and Recent Developments
REAL ESTATE ASSET MANAGEMENT:
Equity Asset Management
Resource Real Estate Opportunity REIT II, Inc. ("Opportunity REIT II"), a public non-traded real estate investment trust ("REIT") managed by the Company that specializes in acquiring multifamily rental properties and selected loans, had the following highlights:
- Acquired $171.7 million of assets and placed $194.6 million of financing during the three months ended June 30, 2016.
- Increased total assets to $815.9 million at June 30, 2016.
Resource Real Estate Opportunity REIT, Inc. ("Opportunity REIT I"), a public non-traded REIT managed by the Company that specializes in acquiring and managing distressed real estate assets, had $973.7 million in total assets at June 30, 2016.
Resource Real Estate Diversified Income Fund ("DIF"), a public closed-end real estate-focused investment fund managed by the Company, has raised $131.4 million since inception.
On February 16, 2016, Resource Innovation Office REIT, Inc. ("Innovation Office REIT"), a company-sponsored REIT that will focus on acquiring office buildings, commenced an initial public offering of its common stock. Resource Innovation Office Advisor, LLC, a subsidiary of Resource Real Estate, Inc, which is a wholly-owned subsidiary of the Company, is the external manager.
On April 28, 2016, Resource Apartment REIT III, Inc., ("Apartment REIT III"), a company-sponsored REIT that will focus on acquiring under-performing apartment communities for renovation, commenced an initial public offering of its common stock. Resource Apartment Advisor III, LLC, a subsidiary of Resource Real Estate, Inc, is the external manager.
Debt Asset Management
Resource Capital Corp., a publicly-traded REIT managed by the Company which focuses on commercial real estate assets, entered into a purchase agreement on August 1, 2016 to sell Northport TRS, LLC, its self-originated middle market loan business ("Northport"), for $247.0 million. RSO is retaining Northport's portfolio of broadly syndicated loans and one self-originated loan.
The following additional highlight contributed to the Company's real estate asset management operations:
The Company's real estate operating segment increased its gross assets under management at June 30, 2016 to $4.2 billion, an increase of $386.0 million, or 10%, from June 30, 2015.
FINANCIAL FUND MANAGEMENT:
The Company's financial fund management operating segment increased its gross assets under management at June 30, 2016 to $18.0 billion, an increase of $728.0 million, or 4.2%, from June 30, 2015.
CORPORATE:
Dividends
- The Company's Board of Directors authorized a cash dividend of $0.06 per share on the Company's common stock which was paid on July 29, 2016 to holders of record as of the close of business on July 15, 2016.
- RSO's Board of Directors declared a cash dividend of $0.42 per share on its common stock for the three months ended June 30, 2016.
Resource America, Inc. is a specialized asset management company that uses industry specific expertise to evaluate, originate, service and manage investment opportunities for its own account, for its joint ventures, and for outside investors in the real estate, financial fund management and commercial finance sectors.
For more information, please visit our website at www.resourceamerica.com or contact investor relations at pkamdar@resourceamerica.com.
Statements made in this release include forward-looking statements, which involve substantial risks and uncertainties. The Company's actual results, performance or achievements could differ materially from those expressed or implied in this release and its other reports filed with the SEC. For information pertaining to risks relating to these forward-looking statements, reference is made to the section "Risk Factors" contained in Item 1A of the Company's Annual Report on Form 10-K and in other of its public filings with the SEC. The Company undertakes no obligation to update or revise any forward-looking statements to reflect new or changing information or events except as may be required by law.
A post-effective amendment relating to securities offered by Innovation Office REIT was declared effective by the SEC on March 7, 2016. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.
A registration statement relating to securities offered by Apartment REIT III was declared effective by the SEC on April 28, 2016. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.
A registration statement relating to securities offered by DIF was declared effective by the SEC on March 11, 2013. A written prospectus relating to these securities may be obtained by contacting Resource Securities, Inc., 1845 Walnut Street, 18th Floor, Philadelphia, PA 19103.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The remainder of this release contains the Company's unaudited consolidated balance sheets, consolidated statements of operations and reconciliation of GAAP net income (loss) attributable to common shareholders to adjusted net income attributable to common shareholders.
| RESOURCE AMERICA, INC | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| (in thousands, except share data) | |||||||||||
| June 30, 2016 |
December 31, 2015 |
||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Cash | $ | 26,522 | $ | 24,132 | |||||||
| Restricted cash | 1,228 | 937 | |||||||||
| Receivables | 1,624 | 1,424 | |||||||||
| Loans and receivables from managed entities and related parties, net | 23,970 | 26,667 | |||||||||
| Investments in real estate, net | 16,100 | 16,022 | |||||||||
| Investment securities, at fair value | 43,916 | 47,476 | |||||||||
| Investments in unconsolidated loan manager | 31,617 | 32,616 | |||||||||
| Investments in unconsolidated entities | 24,278 | 17,553 | |||||||||
| Property and equipment, net | 4,712 | 5,371 | |||||||||
| Deferred tax assets, net | 27,332 | 29,264 | |||||||||
| Other assets | 9,916 | 9,519 | |||||||||
| Total assets | $ | 211,215 | $ | 210,981 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Accrued expenses and other liabilities | $ | 26,360 | $ | 27,184 | |||||||
| Payables to managed entities and related parties | 4,365 | 3,145 | |||||||||
| Borrowings, net | 20,272 | 20,533 | |||||||||
| Total liabilities | 50,997 | 50,862 | |||||||||
| Commitments and contingencies | |||||||||||
| Equity: | |||||||||||
| Preferred stock, $1.00 par value, 1,000,000 shares authorized; none outstanding | -- | -- | |||||||||
| Common stock, $.01 par value, 49,000,000 shares authorized; 35,865,433 and 34,973,987 shares issued (including nonvested restricted stock of 1,730,069 and 1,095,238), respectively | 348 | 339 | |||||||||
| Additional paid-in capital | 313,532 | 311,491 | |||||||||
| Accumulated deficit | (30,304 | ) | (30,676 | ) | |||||||
| Treasury stock, at cost; 15,036,154 and 14,460,024 shares, respectively | (143,209 | ) | (139,858 | ) | |||||||
| Accumulated other comprehensive loss | (4,367 | ) | (3,533 | ) | |||||||
| Total stockholders' equity | 136,000 | 137,763 | |||||||||
| Noncontrolling interests | 24,218 | 22,356 | |||||||||
| Total equity | 160,218 | 160,119 | |||||||||
| Total liabilities and equity | $ | 211,215 | $ | 210,981 | |||||||
| RESOURCE AMERICA, INC. | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| REVENUES: | |||||||||||||||||
| Real estate | $ | 18,467 | $ | 21,116 | $ | 37,630 | $ | 38,082 | |||||||||
| Financial fund management | 7,543 | 6,167 | 14,272 | 13,042 | |||||||||||||
| Commercial finance | 129 | 2 | 205 | -- | |||||||||||||
| Total revenues | 26,139 | 27,285 | 52,107 | 51,124 | |||||||||||||
| COSTS AND EXPENSES: | |||||||||||||||||
| Real estate | 10,204 | 12,082 | 21,222 | 23,581 | |||||||||||||
| Financial fund management | 4,825 | 3,238 | 8,505 | 6,301 | |||||||||||||
| Commercial finance | 400 | 458 | 792 | 1,037 | |||||||||||||
| Transaction costs | 4,040 | -- | 4,040 | -- | |||||||||||||
| General and administrative | 4,452 | 4,181 | 9,335 | 7,478 | |||||||||||||
| Provision for credit losses | (102 | ) | 276 | 7 | 678 | ||||||||||||
| Depreciation and amortization | 506 | 515 | 1,010 | 972 | |||||||||||||
| Total expenses | 24,325 | 20,750 | 44,911 | 40,047 | |||||||||||||
| OPERATING INCOME (LOSS) | 1,814 | 6,535 | 7,196 | 11,077 | |||||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||||
| Gain (loss) on sale of investment securities, net | 134 | -- | 632 | -- | |||||||||||||
| Impairment on investments in available for sale securities | (803 | ) | (4,346 | ) | (901 | ) | (4,346 | ) | |||||||||
| Interest expense | (434 | ) | (455 | ) | (874 | ) | (876 | ) | |||||||||
| Other income (expense), net | 369 | 689 | 876 | 1,003 | |||||||||||||
| Total other income (expense) | (734 | ) | (4,112 | ) | (267 | ) | (4,219 | ) | |||||||||
| Income (loss) from continuing operations before taxes | 1,080 | 2,423 | 6,929 | 6,858 | |||||||||||||
| Income tax provision (benefit) | (130 | ) | 857 | 2,316 | 2,101 | ||||||||||||
| Net income (loss) | 1,210 | 1,566 | 4,613 | 4,757 | |||||||||||||
| Net (income) loss attributable to noncontrolling interests | (1,482 | ) | (1,365 | ) | (1,848 | ) | (3,022 | ) | |||||||||
| Net income (loss) attributable to common shareholders | $ | (272 | ) | $ | 201 | $ | 2,765 | $ | 1,735 | ||||||||
| Basic earnings (loss) per share: | |||||||||||||||||
| Net income (loss) | $ | (0.01 | ) | $ | 0.01 | $ | 0.13 | $ | 0.08 | ||||||||
| Weighted average shares outstanding | 20,835 | 22,867 | 20,722 | 22,915 | |||||||||||||
| Diluted earnings (loss) per share: | |||||||||||||||||
| Net income (loss) | $ | (0.01 | ) | $ | 0.01 | $ | 0.13 | $ | 0.08 | ||||||||
| Weighted average shares outstanding | 20,835 | 23,135 | 21,005 | 23,186 | |||||||||||||
Schedule I
| RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS TO | |||||||||||||
| ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (1) | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| (unaudited) | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||
| Net income (loss) attributable to common shareholders - GAAP | $ | (272 | ) | $ | 201 | $ | 2,765 | $ | 1,735 | ||||
| Adjustments, net of tax: | |||||||||||||
| Transaction costs | 2,164 | -- | 2,381 | -- | |||||||||
| Impairment of investment in unconsolidated loan manager | -- | 2,485 | -- | 2,589 | |||||||||
| Loss attributable to commercial finance | 91 | 305 | 343 | 836 | |||||||||
| Deferred tax provision | -- | 377 | 177 | 528 | |||||||||
| Adjusted net income attributable to common shareholders | $ | 1,983 | $ | 3,368 | $ | 5,666 | $ | 5,688 | |||||
| Adjusted weighted average diluted shares outstanding | 21,124 | 23,135 | 21,005 | 23,186 | |||||||||
| Adjusted net income attributable to common shareholders per common per share-diluted | $ | 0.09 | $ | 0.15 | $ | 0.27 | $ | 0.25 | |||||
| (1) | Adjusted net income attributable to common shareholders presents the Company's operations without the effect of the transaction costs related to the pending merger with C-III, and the Company's commercial finance operations and deferred tax provision. The Company believes that this provides useful information to investors since it allows investors to evaluate the Company's progress in both its real estate and financial fund management segments for the three and six months ended June 30, 2016 and 2015 separately from these items. Adjusted net income attributable to common shareholders should not be considered as an alternative to net income (loss) attributable to common shareholders (computed in accordance with GAAP). Instead, adjusted net income attributable to common shareholders should be reviewed in connection with net income (loss) attributable to common shareholders in the Company's consolidated financial statements to help analyze how the Company's business is performing. |
Contact Information:
CONTACT:
THOMAS C. ELLIOTT
CHIEF FINANCIAL OFFICER
RESOURCE AMERICA, INC.
ONE CRESCENT DRIVE, SUITE 203
PHILADELPHIA, PA 19112
(215) 546-5005
(215) 640-6357 (FAX)